Federal Incentives for Partners Who Work with Tribes
Unlocking Government Preferences and Programs in Indian Country
Doing business with federally recognized Native American tribes opens the door to a robust portfolio of U.S. government incentives. These benefits range from contract preferences and set-aside programs to tax credits and grant access. For investors and businesses seeking stability, profitability, and purpose, federal incentives available to tribal partners can provide a significant competitive advantage — all while advancing the economic sovereignty of tribal nations.
Why Tribes Receive Unique Federal Incentives
Tribes are sovereign governments with a unique legal status under the U.S. Constitution. Their nation-to-nation relationship with the federal government has led to the creation of programs designed to fulfill treaty obligations, support economic self-sufficiency, and reverse the effects of centuries of disenfranchisement.
As a result, tribal governments and tribally owned enterprises benefit from preferential treatment in federal contracting, special access to tax credits and bond programs, and eligibility for targeted grants and subsidies. These incentives are not handouts — they are tools designed to level the playing field and promote tribal-led development.
8(a) Business Development Program for Tribes
The SBA 8(a) Program is one of the most powerful federal contracting tools for tribally owned businesses. Managed by the Small Business Administration, the 8(a) program provides a pathway for certified minority-owned businesses to receive sole-source and competitive contracts with federal agencies.
When the business is tribally owned, it receives unique advantages:
- Exemption from the one-time participation rule (tribes can own multiple 8(a) businesses)
- Exemption from the competitive size standard caps that apply to other participants
- Access to sole-source contracts up to $25 million for the Department of Defense and $7 million for other agencies — without justification
HUBZone Certification and Tribal Advantage
The Historically Underutilized Business Zones (HUBZone) program offers preferential access to federal procurement for businesses in economically distressed areas. Most tribal lands automatically qualify as HUBZones.
- 10% price evaluation preference in full and open contract competitions
- Eligibility for sole-source awards
- Set-aside contracts for HUBZone-certified firms
The Buy Indian Act: Direct Contracting Preferences
Enacted in 1910, the Buy Indian Act gives procurement preference to Indian-owned and controlled businesses when purchasing goods and services for the Bureau of Indian Affairs (BIA) and Indian Health Service (IHS).
- Reduced competition and increased award likelihood for qualified vendors
- Government-to-government familiarity and streamlined procurement process
- Support of tribal economic development through reinvested federal dollars
Tax-Based Incentives Available to Tribal Partnerships
- Indian Employment Credit: Offers up to 20% credit on wages and health insurance paid to qualified tribal employees. IRS Form 8845
- Accelerated Depreciation: Businesses placing facilities and equipment on tribal lands may depreciate those assets at twice the standard rate.
- New Market Tax Credits (NMTC): Investment in tribal land often qualifies for this program offering 39% in federal tax credits over 7 years.
- Opportunity Zones: A large number of tribal lands fall within designated zones that offer deferred or eliminated capital gains tax.
Access to Grant Funding and Loan Guarantees
- USDA Rural Development: Offers low-interest loans and loan guarantees for business development, infrastructure, and community facilities.
- DOE Office of Indian Energy: Provides technical assistance and grant funding for tribal energy projects.
- BIA Loan Guarantee Program: Guarantees up to 90% of private loans made to tribal businesses.
- EDA Indigenous Communities Program: Offers support for tribal infrastructure and economic recovery.
Strategic Use of Federal Incentives
- Develop a Section 17 Corporation to manage joint ventures with legal clarity
- Structure agreements with limited waivers of sovereign immunity for contract enforcement
- Apply for SBA, HUBZone, and Buy Indian certifications early in the business lifecycle
- Align business objectives with federal procurement needs (construction, healthcare, IT, logistics)
Case Examples of Federal Incentive Success
- Gila River Telecommunications Inc. – Leveraged HUBZone and SBA certifications to win major telecom contracts for underserved areas.
- Alutiiq LLC – A tribal 8(a) firm that grew into a billion-dollar contractor specializing in federal security and base operations support.
- Choctaw Defense – A tribally owned manufacturer supplying tactical equipment to the U.S. Department of Defense.
Conclusion: Federal Incentives Drive Tribal Enterprise Growth
The array of federal incentives available to tribes and their business partners is unmatched in any other legal environment in the United States. From multimillion-dollar sole-source contracts to tax-advantaged investment vehicles and guaranteed financing, the U.S. government has created an economic environment where tribal enterprises can thrive.
Businesses that enter these partnerships in good faith — understanding tribal sovereignty, sharing value, and building long-term collaboration — will find themselves not only profitable, but part of a generational movement of Indigenous economic resurgence.
Tags: Federal Incentives, Business & Enterprise, Investment Opportunities, HUBZone, 8(a), Buy Indian Act
Category: Partnerships